FORM 5 SECTION 4 POB TEST

Name_____________________________________ (Total 50 marks)

1. Explain the concept of a contract (2 marks)

2. List three ways a contract can be created (3 marks)

3. List four ways a contract can be terminated (4 marks)

4. Explain what is a breach of contract (2 marks)

5. Give three remedies for a breach of contract (3 marks)

6. Explain the difference between a simply and a specialty contract (2 marks)

7. Give two reasons why documentation is necessary in business transaction (2 marks)

8. Explain what a Consignment note is (2 marks)

9. Explain what a Statement of account is (2 marks)

10. Explain what is Dirty Bill (2 marks)

11. Explain what an Import Certificate is. (2 marks)

12. List three factors that determine the instrument of payment (3 marks)

13. Explain the concept of insurance (2 marks)

14. Explain how an insurance company works (3 marks)

15. List the two types of Life assurance (2 marks)

16. List three principles of insurance (3 marks)

17. List two types of insurance and explain what they cover (4 marks)

18. Give two reasons why insurance is important to business (2 marks)

19. Which of the following describes an essential feature of a valid contract? (1 mark)
A. The offer has been communicated to the offeree.
B. A counter offer has been made by the offeree of the offeror.
C. The offer has been accepted by the offeree.
D. The offer has been made in writing by the offeror.

20. Which of the following documents should be used to indicate to a business

department that supplies of certain goods are needed? (1 mark)
A. Invoice
B. Quotation
C. Stock card
D. Requisition order

21. Which of the following ways is NOT legitimate for terminating a contract? (1 mark)
A. Breach
B. Performance
C. Lapse of time
 FORM 5 SECTION 4 POB TEST

D. Change of mind

22. Which of the following factors prevents an agreement from being considered a valid
contract? (1 mark)
A. Consideration
B. Legal purpose
C. Misrepresentation
D. Offer and acceptance

23. A contract may be discharged by which of the following? (1 mark)

I. Breach
II. Performance
III. Lapse of time

(A) I and II only

(B) I and III only
(C) II and III only
(D) I, II and III

END OF TEST